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1877.] The Silver Question. 289 



Akt. IX. — The Silver Question. 

There can be no doubt that, in performing the functions of 
money, silver is of a greater antiquity than gold. Asia was a 
commercial country when Europe was a wilderness ; and as it is 
a well-established fact that the East has not perceptibly changed 
her habits from the remotest ages, we find at the present moment 
that silver, and silver alone, is the money of Asia. Gold has no 
doubt at times been coined and perhaps used to a very limited 
extent in that region; but these coins have been used more as 
ornaments than money. The reason for coining gold in India 
may have been — indeed undoubtedly was — to give an ornament 
its actual value at sight. Thus, if a piece of stamped gold had a 
certain mark, it represented the then equivalent amount of silver 
rupees ; and, on a husband decking his wife with a chain on which 
hung fifty gold coins, it was understood that the ornament was 
worth, intrinsically, one hundred rupees, as each coin represented 
a gold piece worth two rupees. There are even at the present 
time tons of gold and silver coins used in a similar way in India. 
But from the remotest age silver was the money factor of the 
East. 

During the sway of the Eomans in Europe both gold and silver 
were used as money, and it is from this period that in reality we 
gain some knowledge of the relative value of silver to gold. Such 
value, however, is very doubtful, and we must accept the best data 
and authorities that can be found on the subject. The authorities 
who have made the question their study give the relative value of 
silver and gold, during a period extending from the first to the 
close of the fifteenth century of our era, as follows : — 

Silver. Gold. 

First century average 11.70 to 1 

Second and third century 11.98 to 1 

Fourth and fifth century 14.40 to 1 

Then a blank up to the ninth century. 

Ninth century 12.00 to 1 

Again a lapse to the thirteenth century. 

In the thirteenth century the average was 10.50 to 1 

Fourteenth century 12.30 to 1 

Fifteenth century, up to 1494 10.50 to 1 

vol. cxxiv. — no. 255. 19 



290 



The Silver Question. 



[March, 



These relative values were, however, very changeable. Thus, for 
instance, while the actual ratio during the year 1494 might have 
been 10.50 to 1 in Lombard Street, London, a higher or a lower 
ratio prevailed on the Eialto at Venice, or in the Judengasse at 
Frankfort. But commerce, industry, navigation, and finance itself 
were entirely changed by the discovery of America at the end of 
the fifteenth century. 

The immense quantities of solid gold brought to Europe during 
the sixteenth century from America not only made it necessary to 
use gold as money, but also gave to silver U different relative value, 
while both metals, being used as a medium of exchange, lost their 
former degree of purchasing power. This, of course, was perfectly 
natural, owing to the immense increase of the precious metals in 
the civilized and commercial world, and it is highly interesting to 
study the ratio of silver to gold after the discovery of America. 
Thus we find that in 1494 the relative value was 10.50 ounces of 
fine silver to 1 ounce of fine gold. 

In 1551 it rose to 11.17 to 1 



1559 " 


tl 


it 


11.44 < 


1 


1561 " 


it 


it 


11.70 ' 


' 1 


1623 " 


it 


a 


11.74 ' 


' 1 


1640 " 


it 


a 


13.51 ' 


' 1 


1665 " 


it 


a 


15.10 • 


' 1 



And from that date to the year 1800 it was, on an average, as 
near as possible, 15 to 1. During the present century, from 1800 
to 1872, the average ratio has been 15.47J to 1. 

Thus it will be seen that the immense influx of gold during the 
sixteenth century depreciated the ratio of silver from 10.50, in 
1494, to 11.70, in 1561, or over eleven per cent. This compara- 
tively slight depreciation, notwithstanding the immense influx of 
gold, was owing to two causes : first, gold in a great measure 
assumed the function of money, which silver had hitherto chiefly 
performed ; and, second, the influx of silver kept pace with that of 
gold. 

During the seventeenth century the still greater influx of silver 
from Mexico, Peru, and other South American provinces speedily 
asserted itself, and we find the ratio in 1665 to be as high as in 
1800, and even higher. The fact is, during the seventeenth cen- 



1877.] The Silver Question. 291 

tury, gold like silver could only be obtained by mining, and 
hence the cost of obtaining it from the New "World increased 
proportionally. 

It is remarkable that hardly any writers have looked upon the 
immense increase in the stock of gold during the sixteenth century 
in a practical light. When the Spaniards came to Mexico and 
Peru during the earlier part of the sixteenth century, they did not 
set miners to dig ore or wash alluvial soil ; they simply took by 
force the precious metals of the Incas and Montezumas, which had 
already accumulated for ages in those countries. Hence, it needed 
no more labor or expense to get gold during that period than it 
would now cost for a band of pirates to ravage England and 
France of their accumulated stock of precious metals and bring 
them to America. But when this enormous supply of precious 
metal was exhausted, manual and expensive labor had to be em- 
ployed to obtain the metal ; and it is owing to this fact that not 
only did gold and silver retain their value as money, but also that 
the values of the two metals maintained a comparatively stable 
relation. 

The main effect of the influx of precious metal into Europe, 
during the two centuries succeeding the discovery of America, was 
bloody and unrelenting war. This expensive pastime found even 
the enormous influx of gold and silver into Europe inadequate, 
and the great nations had recourse to two expedients for replenish- 
ing their exchequers, — first, loans, and, second, the more con- 
venient forced loans of paper money. There is, of course, a great 
difference between a paper circulation resting upon an actual 
metallic basis and one based upon the faith of government. The 
one, being redeemable at the will of the holder, is, to all intents 
and purposes, actual money ; the other is subject to the internal 
political state of the country and to the "supply and demand" 
of the metal in the land where the paper money is used. But 
an irredeemable currency has naturally the effect of banishing 
both gold and silver, to a great extent, from those countries where 
it was not only used formerly, but where it would be in great 
demand if an irredeemable paper currency should cease to exist. 
For instance, when this country resumes specie payment, if it be 
done entirely on a gold standard, it will require, at least, from 
four to five hundred million dollars in gold not merely to resume, 



292 The Silver Question. [March, 

but to beep that amount of gold always in the country ; whereas 
the whole amount of gold in the United States, including the 
Pacific States, is calculated at about one hundred and fifty mill- 
ions. 

As to the amount of silver needed, if this country remonetizes 
silver and goes again to a double standard, that is one of the 
knotty questions in which the present equivocal relative value of 
silver to gold is involved. If the relative value of silver and gold 
could be fixed with some degree of certainty, — say, for argument's 
sake, 15£ to 1, — it would only require two hundred millions of 
silver, and two or three hundred millions of gold. Thus the two 
metals would divide the function of resumption, perhaps with ease, 
but certainly with a fixed stability. But if the rest of the world 
sells silver, and offers it at seventeen ounces to one of gold, it 
would naturally follow that the United States would be speedily 
depleted of her gold, receiving silver for it, and the country would, 
after all, have a depreciated metallic currency as compared with 
the other specie-paying countries of the world. In short, silver 
has not only become relatively depreciated, but it has become 
during the last year dangerously fluctuating ; and this is the 
main question now at issue, whether silver remonetized in the 
United States would assume its former comparative stability of 
relative value to gold, or whether it needs a still stronger com- 
bination with foreign countries to enforce stability. 

The relative value of silver to gold since the wonderful produc- 
tion of gold from 1849 to 1872, has been singularly steady, — its 
ratio fluctuating between 15| and 15f from 1852 to 1870. Yet 
the slight fluctuation of one eighth caused inconvenience. 

In 18G5, the celebrated Latin monetary convention came into 
existence. This convention consists of France, Italy, Belgium, and 
Switzerland. Their agreement was to coin pieces in silver of one and 
five francs respectively, and five, ten, and twenty franc gold pieces, 
at the rate of 15J, fine silver, to one, fine gold ; thus giving, in the 
first place, more than sixty millions of the most thriving and in- 
dustrious people in Europe a uniform currency and a uniform 
standard. Silver and gold coinage was made free in the conven- 
tion ; that is to say, any individual having silver bars in Paris, 
Florence, Geneva, or Brussels, could go to the mint and have it 
coined into five-franc pieces. 



1877.] The Silver Question. 293 

Now it might have been supposed that such a powerful Union 
would have given a permanent stability to the relative value of 
the two metals, but such was not the Case. From 1865 to 1870 
the fluctuation was 15| to one, which means that, instead of 15| 
ounces of silver, only 15| ounces were necessary to buy one ounce 
of gold. This difference was sufficient to deprive France, Italy, 
Belgium, and Switzerland of much of their silver money, and gold 
circulated freely. It is a natural law of trade that the cheaper 
money will exclude the dearer, although the difference is less even 
than one per cent. 

But a change was soon to come over the relative value of silver 
to gold, which in its violence and suddenness has no parallel in 
history. In 1870 the Franco-German war broke out ; in 1871 Ger- 
many not only made peace as a victor, but exacted an indemnity 
of one thousand million dollars from France. As is well known, 
Germany became a united country, not only in name, but in actual 
federation under the rule of one federal sovereign. It was, of 
course, necessary, as an act of union-policy, to have a uniform 
monetary system. Up to the date of the Franco-German war, 
Germany, being divided into numerous sovereignties, had all sorts 
of different moneys. Prussia had the thaler and silber groschen, 
Bavaria had gulden and kreutzers, the Hanseatic Free Towns 
had marks and schillings, while the Southern States of Germany 
had florins and rix-dollars. A uniform coinage in the once more 
united Germany was, therefore, the first important step in the 
German Parliament. Hitherto both gold and silver had there cir- 
culated, but the chief circulation — at least eighty per cent — was 
silver; yet, to the great astonishment of the whole world, Ger- 
many, in 1872, declared her intention to demonetize silver and 
make gold only a legal tender. No satisfactory reason has been 
given for this bold step, as it must be obvious to all financiers and 
adepts in the metallic money question that, had Germany joined 
the Latin Union and adopted its ratio of silver to gold, such an 
accession would not only have given the ratio a greater stability, 
but would further have given Germany's great stock of silver 
bullion a stable value. It is maintained that Germany, imitating 
England in her single gold standard, was actuated by great com- 
mercial considerations ; but such an argument does not bear the 
strain of a full investigation. England, being the world's centre of 



294 The Silver Question. [March, 

commerce and finance, naturally finds a single gold standard most 
suitable to her purposes. It was a wise measure for England to 
adopt the single gold standard in 1816, because the fixed value of 
gold at £3 17s. 10£d. per ounce was uniformly admitted through- 
out the world. England, therefore, proclaiming that she deals 
only in gold as money, drew to herself the exchanges of the com- 
mercial world from the remotest corners. 

Ear different is the case with Germany. Her foreign commer- 
cial importance is below that of Holland ; nor can she ever hope 
to rival not only England, but even France, in her foreign com- 
merce or foreign exchange transactions. Hence, it cannot be well 
maintained that the demonetizing of silver and the adoption of the 
single gold standard was a pure and simple commercial or financial 
measure. 

It is, perhaps, a bold suggestion, but it may, nevertheless, be 
boldly made, whether the adoption of the single standard in 
Germany is not, after all, a necessary war-measure. It is a well- 
known fact that during the Franco-German war the invading 
army in France had immense difficulties in getting supplies for 
her ready silver thalers, or, in fact, silver money of any kind, and 
it was found that there was great disadvantage in paying enor- 
mous sums in silver. The great bankers in Berlin, Frankfort, and 
even London could tell the world how, during the month of Au- 
gust, 1870, and of March, 1871, the German army exchequer had 
to be supplied with gold coin for war expenditures. This difficulty 
may have induced the provident thinking minds of German states- 
men to adopt a single gold standard which, should future wars 
occur, would place Germany, in her monetary as well as military 
system, at an advantage. Should this theory be well founded, 
neither Germany nor England is likely to adopt the bi-metallie 
standard again, at least so long as there is a shadow of a chance of 
fluctuation in the relative value of silver. The former great em- 
pire would be actuated by a policy on which she stakes her exist- 
ence as a nation, and the latter, by the well-defined rules of trade 
and exchange demonstrated by a vigorous practice of sixty years. 
Germany, having concluded not only to have a uniform money for 
the Empire, but to make gold the single standard, demonetized 
silver. There is in England, Germany, and the United States, 
where gold alone is the standard, an immense amount of silver in 



1877.] The Silver Question. 295 

use as money. But the shillings of England, the five-mark silver 
piece in Germany, and the half-dollars in the United States are 
the so-called subsidiary coins ; that is to say, in England, if a 
man has to pay a note of twenty or one hundred pounds, he can 
tender only two pounds in silver, — the rest must be paid in 
gold. It is the same in Germany, and at present only five dol- 
lars in silver is a legal tender in the United States. Although 
there is, at least, one hundred and fifty million dollars' worth of 
silver in daily use in the " silver-demonetized " countiies of Eng- 
land, Germany, the Scandinavian States, and the United States, 
yet that silver money is only used as subsidiary money and not as 
legal tender. 

Germany began to call in her silver coinage in 1872. The effect 
during that year was not very marked on the price of silver, as she 
first exchanged all the small debased coin for the silver and nickel 
subsidiary money. But when in 1873 - 74 she began to exchange 
a great amount of her silver thalers and florins for gold, she had 
to find a market for her demonetized silver. Much of this silver 
went to the States of the Latin Union, where it was taken at 15| 
to 1, and a still greater portion came to London in bars to be sold 
for the East India market. This unforeseen and unnatural supply 
caused a depreciation in the price of silver, and it fell from 60f 
pence per ounce to 59 and 58 pence. 

The Latin Union, finding that a free silver coinage would not 
only speedily deplete them of their gold, but would also saddle 
them with a depreciated silver currency, at once agreed to restrict 
the silver coinage to 140,000,000 francs or about $ 28,000,000 per 
annum (at present the silver coinage is further restricted), and 
thus one great avenue in Europe for silver, passing unrestricted as 
money, was shut up. In the mean time three distinct events de- 
veloped themselves to make silver in 1876 - 77 the most fluctuating 
metal in existence. In the first place, Germany, hitherto a cus- 
tomer for silver, became the heaviest seller. The amount of silver 
demonetized, which has accumulated in Germany, is variously es- 
timated at between three and four hundred million dollars. This 
enormous amount is seeking a market, and is ready to supply the 
metal the instant there is a chance of getting anything like the 
former price for it. Secondly, the Nevada silver-mines from 1872 
to 1875, inclusive, were very prolific. In fact, the yearly produc- 



296 The Silver Question. [March, 

tion of silver during the four years from 1872 to 1875, inclusive, 
throughout the world was seventy-five and one half million dollars, 
whereas, during the present century, up to the discoveries of silver 
in Nevada, it only averaged between forty and fifty million dollars 
annually. Thirdly, the drawings of bills by the East India Coun- 
cil in London on India developed and increased steadily, and thus 
shut out a customer that otherwise would have come for silver to 
Europe. To understand this fully, the following explanation is 
necessary: After the suppression of the Sepoy rebellion in 1857- 
58, England discovered that India could only be held as a depen- 
dency by building a gigantic network of railroads. She set to 
work at once, and during the last fifteen years something like 
seventeen thousand miles of rail have been laid down in India. 
These railways were constructed by the government, and the money 
was raised in England at an average rate of five per cent which 
the government guaranteed, the interest being payable in London 
in gold or sterling money. 

The earnings of the Indian railways go into the India Exchequer 
— of course, in silver rupees, like all the rest of the revenue. 
Now, in order to pay the interest on these bonds or any other India 
bonds held in England, the India Council in London sells twice a 
month bills of exchange on Bombay, Calcutta, and Madras. They 
sell, for instance, every fortnight ten million rupees, in convenient 
sums, on these three cities, payable at the respective treasuries in 
India, for which the buyer in London gives gold, and this gold 
or sterling money is applied to the payment of interest on the 
India Eailroad and national bonds. These drawings have in- 
creased from £8,918,500 in 1870 to £13,952,500 in 1872, to 
£ 14,835,100 in 1873, and to the enormous amount of £ 16,300,000 
in 1875, the latter amount representing 81,500,000 dollars. Now, 
it is perfectly obvious that merchants and bankers buy these bills 
on India in order to pay for the produce that comes from thence, 
and which the exports to India fail to balance. 

If, therefore, the India Council in London should not step in to 
sell bills on India, the merchants and bankers would have to send 
silver to make good the balances. Thus a channel for the outflow 
of silver was stopped, in 1875, by the India Council in London, 
which retained in the country five million dollars more than the 
whole production of silver in that year. Add to this another 
cause. The Indian and Chinese products for which silver is paid 



1877.] The Silver Question. 297 

were and are, since 1873-74, very low in price, and it there- 
fore takes less silver to purchase a larger quantity of Eastern 
commodities. Now, on taking the several agents into united 
consideration, it will certainly not seem very mysterious why 
silver should not only have fallen in price, hut why it should be 
daily fluctuating. The climax of the violent fluctuation and the 
fall was severest during the late summer months, when silver 
actually went down to 47 pence per ounce in London, which is 
equal to a fall of about 22 per cent of the usual ratio of 15J to 1. 
From August, 1876, to February, 1877, the price of silver has 
fluctuated from 47 pence to 58J pence, and there has hardly been 
a single day during the last nine or ten months that silver did 
not fluctuate from one half to one per cent daily. 

In 1837 this country adopted a silver ratio of 16 to 1, in oppo- 
sition to the existing and subsequent ratio in the rest of the 
world ; as everywhere else the ratio was 15|, fine silver, to 1, fine 
gold. "Scratch a Eussian, and you will find a Tartar," said 
Napoleon. It may be safely said here : " Scratch any stupid 
economic question, and you will find the club-foot of Protection 
sticking out." In 1830 - 34 gold had been discovered in Georgia 
and North Carolina, and it was soon found that the aristocratic 
gold-dust of these States could not well compete with the pauper- 
labor gold-dust of the Ural Mountains. Hence the extraordinary 
expedient was adopted of making gold dearer and silver cheaper 
in the United States. The consequence was that the cheap silver 
of America was speedily exported to Europe, where it brought a 
higher price, and the United States were left to a gold currency 
that was found inadequate, and that degenerated, as is well 
known, into paper and "wildcat money" until the discoveries 
of gold in California. It is, however, but just to say that gold 
began to circulate freely in the United States from the memora- 
ble years of 1846 and 1847. The potato famine in Ireland 
and the general bad crops during two years in Europe made 
the American export-trade in breadstuff's very valuable, and gold 
came over here in great quantities. In 1849 the California gold 
began to pour into our money centres, and from that time up to 
1861 gold was the chief circulating medium in this country; and 
although we had a bi-metallic standard and silver dollars of 412| 
grains were legal tender, yet no silver dollars were either coined 
or used, for the simple reason that the then ratio was 15 £ to 1 in 



298 The Silver Question. [March, 

Europe, while a 412J grain silver dollar was 16 to 1 in the United 
States. In 1861 the war broke out, and we took to paper money. 
Both gold and silver soon vanished from the land. During fifteen 
years the question of the silver and gold ratio has therefore been 
quite immaterial to the monetary system of the United States, 
inasmuch as our legal tender, east of the Eocky Mountains, was 
irredeemable paper. "We, nevertheless, had on the statute-book 
the currency fiction that the ratio of silver to gold in the United 
States was 16 to 1. 

On February 9, 1872, a bill to demonetize silver was intro- 
duced in the House of Eepresentatives, and out of this bill event- 
ually grew the demonetizing Act of 1873. It is a remarkable fact 
that the chief inflationists, like Mr. Kelly and others, were anxious 
and voted for this measure. The inflationists up to within a 
recent period when silver became depreciated looked upon that 
metal with the same aversion as they looked upon gold. The 
philanthropic inflationists maintain that gold and silver as money 
are the enemies of labor, of enterprise, and of the people. Mr. 
Kelly, the apostle of inflation, has made the great discovery that a 
currency which is exportable and can be sold or is wanted in 
foreign countries is the most dangerous thing imaginable. Hence, 
his philanthropic desire for such an unexportable currency as 
paper which can only have value at home. 

It is not our purpose to extend the argument against this absurd- 
ity. We content ourselves by pointing out that the happy island 
of Santo Domingo has been blest with an unexportable paper cur- 
rency for many years, yet we fail to find prosperity and commercial 
enterprise in that island. In justice to Mr. Kelly, however, it 
must be confessed, that in no country in the world do manufac- 
tured articles fetch such enormous prices. A paper of pins sells 
for one hundred to one hundred and fifty dollars, and an axe for 
three thousand to three thousand five hundred dollars. As for a 
suit of clothes, that must be paid for by a bundle of five thousand 
dollar notes. Happily, the people of Santo Domingo are so fortu- 
nate, under the blessing of their money, that they dispense with 
their clothing and shoes and many things that are elsewhere neces- 
saries of life. But the inflationists finding in 1873 a chance to 
declare silver unfit for money, naturally accepted the boon. They 
would gladly have demonetized gold, too, as that was really what 
they wanted. It is, however, a melancholy fact, that this impor- 



1877.] The Silver Question. 299 

tant act of demonetizing silver in 1873 received little attention 
from our legislators. Indeed, the importance of it was not fully 
understood. We had at the time only one currency, which was 
paper, and it was of no immediate consequence whether silver was 
called money or not. Nevertheless, the act was a mistake. Had it 
not been passed, much controversy and much trouble would have 
been avoided. Still the fact remains ; we certainly did demonetize 
silver in 1873, and that act has become one of great importance. 
It is well known that in 1874 a great effort was made by the infla- 
tionists, both in the Senate and the House, to further inflate our 
paper currency. In fact, the bill actually passed both Houses, 
and was only frustrated by the President's veto. The inflationists 
then began to despair of ever realizing their fondest hope of giv- 
ing the country an unexportable currency! Unhappily, another 
quite new event sprang up to revive the souls of these fainting 
philanthropists. Silver, which was hitherto comparatively stable 
in price, began to fall in value, and the opportunity was immedi- 
ately seized to replace the defeated inflation measure. In 1875 a 
412| grain dollar was worth about ninety-four cents in gold. In 
1876 the price began to fluctuate and went down to eighty -four 
and eighty-five cents. Then arose the great clamor for making 
silver dollars legal tender, and all the Kellys, Landers, and other 
extreme inflationists became the sincere friends of the same silver 
which but three years before they despised and hated as an arch 
enemy to mankind. 

During the first session of the present Congress Mr. Bland in- 
troduced his silver bill. That measure would certainly have re- 
ceived as great a majority of votes last year as it did some weeks 
ago ; but the Democratic House was afraid of the effect it would 
have upon the elections, and the bill was delayed by " filibuster- 
ing " during the whole of the first session. All that Mr. Bland 
obtained was the famous Silver Commission. A joint resolution, 
passing both Houses on the very last day of the session, created 
three Senators, Messrs. Jones, Boutwell, and Bogy, and four Con- 
gressmen, Messrs. Randall, Gibson, Bland, and Willard, to form a 
Silver Commission during recess, and to appoint three experts. 
This Commission was to take evidence on the subject, and report 
to Congress on the 15th of January, 1877. It was charged to 
make very important inquiries, — for instance, " to inquire into the 
policy of continuing legal-tender notes concurrently with the metal- 



300 The Silver Question. [March, 

lie standards, and the effects thereof upon the labor, industry, and 
wealth of the country." It was also charged to inquire "into the 
best means provided for facilitating the resumption of specie pay- 
ments." These inquiries translated into unsophisticated English 
mean, to make silver money a legal tender and redeem the green- 
backs in that silver money. The country was not left in doubt 
about it very long, for on the 12th of December the Bland silver bill 
passed the House by an overwhelming majority. The gist of the bill 
is, " that there shall be, from time to time, coined at the mints of the 
United States silver dollars, of the weight of 412J grains of stand- 
ard silver to the dollar, as provided for in the Act of January 18, 
1837, and that said dollar shall be a legal tender for all debts, 
public or private, except where the payment of gold coin is re- 
quired by law." Thus, then, this Act would redeem the green- 
backs in silver dollars ; it would also pay interest on our bonds in 
silver, except in the very latest ones, which represent gold coin ; 
and silver would be received at the custom-house instead of gold. 
This bill is now before the Senate, and may be acted upon before 
this article is published. 

In the mean time, two strange events have happened. First, gold 
has fallen to only 5 per cent premium, and silver, instead of being 
worth 50 pence, or even 53 pence, has gone up to 57 and 58, so 
that the silver-paper financial geniuses are, for the moment, com- 
pletely paralyzed. There is, however, no danger of the Bland bill 
passing the Senate in the shape in which it left the House. The 
silver legal- tender clause may perhaps be restricted to 50 dollars, 
and other amendments further restricting silver may be added. 
There can be no doubt that, should the silver bill be acted on in 
the Senate, such a restrictive measure would pass, — perhaps by a 
narrow majority, — yet it would be the popular measure of the 
Forty-Fourth Congress. 

It requires very little consideration to see that as long as silver 
fluctuates as at present, a silver dollar in America of 412| grains 
standard silver would only be an article of merchandise, and not 
money ; or it would partake of the nature of our irredeemable 
greenbacks, and fluctuate in the same manner as paper money 
does, with the rise and fall of gold. It is by no means edifying 
to find that the monetizing of silver has been seized upon because 
this metal has become comparatively depreciated, for, instead of 
giving the country a better money than greenbacks, we may be 



1877.] The Silver Question. 301 

saddled with a currency that will be still more fluctuating than 
paper. 

Is it advisable to have silver money ? There is not the slight- 
est reason why the United States should not have a bi-metallic 
standard, and why silver should not be used as money. This 
metal has for ages been the most extensively used material for 
money. America, both North and South, has been developed by 
means of the silver dollar ; nor is the great argument of gold- 
standard advocates, that silver is too bulky, a good one. People 
would find it very inconvenient indeed to carry $ 1,000 gold 
in their pockets, simply because $ 1,000 gold weighs about 56 
ounces. Silver, like gold, must have its representative, and that is 
at all times a redeemable paper currency. If, therefore, silver can 
be found to have a stable relative value to gold, say, 15|, 16, or any 
other ratio, to 1, and if this ratio is once so stable that at all times 
15 J ounces of fine silver, for instance, can be exchanged in New 
York, London, Paris, or St. Petersburg, for 1 ounce, fine gold, 
then the two metals are as money the same. Hence it will be 
seen that silver can, and should be, used as money, and the only 
difficulty is to secure for it a constant value. 

It has been maintained that, if the United States were to remon- 
etize silver, this very fact and the great demand for silver in this 
country would be sufficient to give it a stable value. Time alone 
can prove the correctness of such an assertion. There can be no 
doubt that such an act would prevent silver from descending to 
panic prices as it did in August last ; but it is decidedly doubtful 
whether a stable ratio could be maintained. The best and the 
most conservative plan of the true friends of a bi-metallic stand- 
ard is a Congress of the nations who should agree upon a standard 
relative value of silver to gold. This plan is above all the one 
most persistently advocated by M. Henri Cernuschi, of Paris, — a 
man who has given the bi-metallic question more time and study 
than any other living writer. M. Cernuschi is sincerely devoted 
to bi-metallism. He even dreams of converting England and Ger- 
many to this faith. In this he will find himself mistaken. But 
there can be no doubt that the Latin Union would gladly join in 
an International Congress with the United States, Holland, Russia, 
Austria, and some South American States in this great work. And 
besides all this, it might be found that England would be willing 
to join the Congress in behalf of India. This accession alone 



302 The Silver Question. [March, 

would accomplish the desired result. It must be obvious that if 
such a powerful combination should agree to make the ratio of silver 
to gold, say 15J to 1, all future fluctuations of silver would practi- 
cally cease. It is to be regretted that the Senate's resolution 
recommending the United States to join such a Congress was 
lately defeated in the House by the ardent advocates of silver 
themselves. They fear that such an act would delay the remone- 
tizing of silver at home. But a little cool consideration ought to 
show them that the speedy remonetization of silver in the United 
States would be a dead letter as long as the price of silver daily 
fluctuates in the markets of the world, and that a powerful com- 
bination alone can realize a bi-metallic standard both here and 
elsewhere. 

An International Congress would have to decide only two 
great questions, first, Is silver a fit metal to be used as legal- 
tender money 1 If Congress is of opinion that silver is not a fit 
metal for such a use, there would be an end of all further discus- 
sion. If, on the other hand, it should decide, as, no doubt, it 
would, that silver is a metal fit for money, then comes the sec- 
ond question, What shall be the ratio or relative value of sil- 
ver to gold ? Now, this is simply the whole kernel of the hard 
nut. All other arguments, learned or unlearned, are unprofitable 
subterfuges. M. Cernuschi, although called the bi-metallic Pope, 
is not alone in his opinion of the indispensability of an Interna- 
tional Congress to establish the ratio of silver to gold. He is for- 
tified by the assent of the best money authorities in Europe as 
well as in the United States. Perhaps no writer in this country 
on the silver question has more forcibly, though alas ! a little too 
learnedly, treated the subject than Mr. S. Dana Horton of Ohio. 
His book on silver and gold is very valuable ; and although the 
present writer certainly disagrees with him on the fundamental 
law of supply and demand, — a law which Mr. Horton unfortu- 
nately partially ignores, — his book is a monument of usefulness. 
A few extracts from this young but eminent writer on the subject 
will show how correct and far-seeing a thinker he is. .Mr. Horton 
says : — 

" Passing by, then, the question of treaties which chiefly aim to se- 
cure a fusion of currencies, we come to the consideration of a treaty 
simply providing that each contracting party for a certain time will 
make and keep gold and silver at a certain ratio legal tender for all 



1877.] The Silver Question. 303 

sums, and will maintain free coinage of both metals, reserving the priv- 
ilege of coining its silver and copper tokens as it shall please. 

" Let ns suppose, then, that the chief powers should join in an Inter- 
national Conference and form a mutual compact to this effect. It would 
seem safe to assume that it need be no part of the effect of such a 
treaty that the coins of the contracting parties should have a circula- 
tion outside of the country of their creation appreciably greater than 
they now have, and that the control of each nation over the counter- 
feiting of its coins would be as efficient as it now is. 

" Would it involve a limitation of independence in other directions 1 
Certainly it is not apparent that the situation under such a treaty could, 
in any conceivable event, be made worse than it is. Why should the 
effect upon other nations of a bad crop, of a suspension of specie pay- 
ments, of a war in one, be increased by an agreement of the nations to 
make gold and silver legal tender at the same ratio % On the contrary, 
it seems, certainly at first glance, that the effect of such an agreement 
would be to guarantee, as far as it is possible, the other nations against 
a financial or commercial shock." 

Space will not admit of more interesting quotations from Mr. 
Horton's book. But the above observations are sufficient to prove 
that his opinion is worthy of the highest consideration. And 
thus, it would seem that an International Congress on the silver 
question and an agreement of the nations to fix the relative value 
of silver to gold is the only safe solution of the vexed question for 
ages to come. 

It was the writer's intention to close this article here, but it 
is impossible for him not to notice our periodic resumption mania. 
Gold has fallen as low as 4|, although it stands, at the moment 
of writing, at 5J. It is, therefore, assumed that now is the time 
to resiime. Those who know the writer are well aware that he is 
as ardent for hard money as for free-trade, and cannot therefore 
be charged with favoring an irredeemable currency. But he looks 
upon immediate resumption as a perfect delusion. The reason why 
gold is at 5J or 5|^ premium is because our whole trade is para- 
lyzed. The import trade has fallen off from $503,152,936, ex- 
clusive of bullion in 1875, to $426,776,976, exclusive of bullion in 
1876, a falling off of $76,375,960. 

The manufacturers do not use the same quantities of raw mate- 
rials, such as wool, metals, hides, and many other articles, while 
the people use less sugar, coffee, and many other necessaries as 
well as luxuries, both domestic and imported. 



304 Tlie Silver Question. [March, 

Falling off of Imports in 1876. 

1876. 1876. Decrease. 

Coffee $59,233,725 $44,221,373 $15,012,352 

Hides 15,641,236 11,874,406 3,766,830 

Hemp 2,035,155 1,922,637 112,518 

Sugar and Molasses 79,177,763 70,988,376 8,189,387 

Tin Plates 12,098,885 9,416,816 2,682,069 

Raw Wool 10,662,834 6,843,670 3,819,164 

Total decrease in six items $33,572,320 

The custom-houses, instead of receiving $165,000,000, or 
$170,000,000 for duties, barely receive $130,000,000. Thus 
there is little demand for foreign bills or floating gold to pay 
custom-house duties. 

In the mean time, Europe being threatened by a war-cloud, and 
Great Britain having had a bad harvest, our breadstuffs are in de- 
mand, and, as bills cannot be sold, gold has come over from Europe 
in great quantities. Hence gold is so low ; but the moment trade 
revives, and an impulse is given to speculation, our imports will 
increase, the floating gold will be needed for duties and the bills 
for payment of foreign goods. 

Thus gold will go up in price. As for resuming at present, the 
most pertinent question is, With what ? Surely the $150,000,000 
gold and silver in the country are entirely inadequate to resume 
$ 730,000,000 of outstanding paper. But it is said that by selling 
bonds in Europe the gold can be brought here. If the Bank of 
England should lose in one week £5,000,000 in gold, she would 
raise the rate of interest to five per cent. Should she lose two or 
three millions more the next week, she would raise it to seven per 
cent, and would go on raising it to ten or twelve per cent. Where 
would our bonds be then ? Instead of being sold in London, they 
would be sent here for sale, and gold would flow to England as 
water runs down hill. 

But the President's plan for funding greenbacks in a 4| per cent 
or even a 4 per cent bond is perfectly sound. Yet that does not mean 
immediate resumption ; it only means preparation for resuming. 
And it would be wise for the nation to understand that the volume 
of the currency has to be reduced by funding and cancelling green- 
backs at least forty per cent of its present circulation before im- 
mediate resumption can take place. 

J. S. Moore.